Healthcare is a field where one small issue can lead to bigger and bigger ones, which can end up being fairly costly. This is why making sure your contracts are foolproof is so important. If you’re someone who works in the healthcare industry, you know how cumbersome it can be to manage contracts in your organization. It’s almost impossible to keep track of all of them at once. But that’s where contract lifecycle management software comes in to solve your problems.
What’s at risk for the healthcare industry?
Contract lifecycle management in the healthcare industry is a huge topic, and it’s also one that deserves your attention. If you’re not already managing and documenting contracts for your company, you may be putting yourself at risk for budgetary missteps and legal risks. These are just some of the interesting statistics about the price of contract failures:
● The average cost of a breach is $7.35 million.
● The average cost per lost or stolen record is $380.
● The average cost of a data breach to a healthcare organization is $2.1 million, which can be as high as $4 million for a small healthcare organization and $5 million for large healthcare organizations.
Where contract management falls short
Contracts are legally binding agreements between two parties that signify an agreement has been made between them. They can be used to regulate any number of transactions and services, including those related to healthcare. Contract failures can result in lawsuits against the company that broke its agreement, which can lead to costly settlements or even bankruptcy proceedings.
Breach of contractual obligations
Failing to manage contracts correctly can lead to serious consequences for your business and worst losing money because of lack of compliance with contractual obligations.
If you’re not using contract lifecycle management software to manage your contracts, there’s a chance that you will breach a contractual obligation or fail to fulfill an obligation under the contract. This could lead to a lawsuit or arbitration, which is costly and time-consuming.
Unauthorized disclosure due to data breach
When you have data breaches in your organization, it’s likely that they will affect your contracts as well. If sensitive information about patients or clients was compromised during the breach, it could expose your organization to lawsuits from those who were affected by the breach.
Substandard quality of care
If your care is substandard or poor quality, it could lead to complaints about the quality of care being provided by your facility or company. This would likely result in negative press coverage and potential lawsuits against the company or facility.
How to prevent legal risk
It’s no secret that the healthcare industry is rife with legal risk.
You can’t turn on the news without hearing about a new healthcare crisis, from a hospital that accidentally disposed of radioactive materials to an insurance company that denied coverage for preexisting conditions.
But what many people don’t realize is that much of this legal risk stems from simple mistakes in the contract lifecycle management process.
So how do you prevent these legal risks? One way is by using contract lifecycle management software. This software helps you manage your contracts throughout their entire lifecycle—from creation through renewal—so that you can ensure they’re up-to-date and accurate at all times.